Switzer Dividend Growth Fund January 2020 Portfolio Update

Welcome to the January 2020 Investment Update for the Switzer Dividend Growth Fund (SWTZ). Click here to download the report.

Investment Objective

The Switzer Dividend Growth Fund (SWTZ) is an income-focused exchange traded managed fund with a mix of yield and quality companies. The objective of the fund is to generate an above-market yield while maximising franking where possible and to deliver capital growth over the long term. We select companies that, in aggregate, generate sustainable dividend income. The fund is characterised by a strong and diverse portfolio of companies that exhibit good cash flows and strong business models.

Performance Summary

Over the past 12 months, SWTZ has paid a distribution yield of 7.51%, or 10.73% including franking credits. Distribution yield is calculated as the distributions received over the 12 months to 31 January 2020 relative to the price at the beginning of the period.

Given its focus on income and capital preservation, over the long term we expect SWTZ to marginally underperform in rising markets and marginally outperform in falling markets. The portfolio was 4.25% higher over the month of January, marginally lagging the S&P/ASX 200 Accumulation Index which returned 4.98%.

Portfolio Commentary

The SWTZ portfolio was little changed through January. However, with most companies set to report their first-half earnings in February, SWTZ investors should expect to see some increased trading activity in the coming month.

In the light of the increasing risks associated with the continuing spread of the Coronavirus and its potential negative economic impact, we reduced SWTZ’s exposure to Sydney Airport. Whilst the virus is likely to negatively impact sentiment across several industries, the first order impacts are already being felt in the Tourism and Leisure sectors.

 

Image Source: BBC

SWTZ’s holding in BHP Group was increased during the month on the expectation that the company will likely report a strong first-half earnings report (due 18 February) accompanied by the potential for a larger than expected dividend payment. Having hit a 10-month low in November 2019, the 12% increase in the iron ore spot price since then has been surprising relative to analyst consensus forecasts and encouraging for BHP’s future earnings prospects.

SWTZ’s portfolio benefited from the strong share price performances of several growth companies held throughout January with eight names rising 10% or more. These were Woolworths Group, Link Administration Holdings, James Hardie Industries, CSL, Coles Group, Reliance Worldwide, Goodman Group and Challenger. Star Entertainment Group (-9.1%), Unibail-Rodamco-Westfield (-8.4%) and Insurance Australia Group (-7.6%) experienced the largest falls.

Market Commentary

There were several conflicting themes running through markets over January that led to disparate outcomes. On the plus side, the US led with a positive start to its reporting season and the release of strong housing data (housing starts in December 2019 rose a whopping 16.9% month on month). The S&P500 finished the month flat whilst the NASDAQ was up strongly. On the negative side, it was mostly about the Coronavirus. The spread of the virus impacted the confidence of the major Asian markets, particularly those in areas closest to the epicentre. The Hong Kong, China and South Korean markets all suffered large falls late in the month. Political tensions also captured the headlines, this time it was the US and Iran.

The major developed market bonds saw their benchmark yields dramatically decline (prices higher) in January as investors sought refuge in bonds from the potential financial fallout from the Coronavirus. The US 10-year benchmark treasury yield fell 40 basis points to 1.51% whilst the Australian 10-year equivalent was 42 basis points lower at 0.95%.

Overall, world equity markets were mixed in January. As mentioned, the major Asian bourses fell including Hong Kong (-6.7%), China (-2.3%), South Korea (-3.6%) and Japan (-2.1%). The UK (-3.4%) and more broadly, Europe (-2.8%) also fell. Australia (+5.0%) and the US (S&P 500 -0.16%, NASDAQ +2.0%) were outperformers with the Australian market’s large exposure to interest rate sensitive companies buoyed by the large fall in bond yields.

S&P/ASX 200 benchmark sector performance saw Health Care (+13.2%), and Information Technology (+11.1%) leading the market higher in the month. These two sectors have also been primary drivers of the market over the last year. Both are low yielding with low franking and, as such, their weights in SWTZ’s portfolio are lower than the index. All sectors were positive with Materials (+1.8%), Energy (+0.7%) and Utilities (+0.6%) bringing up the rear.

The Australian market saw a range of companies (15 in total) downgrade their earnings guidance over the period including Treasury Wine Estates, Insurance Australia Group, Nearmap, Kogan.com and Jumbo Interactive.

Portfolio Outlook

The SWTZ portfolio is heavily weighted towards the AREIT, Financials and Infrastructure sectors which provide secure and attractive dividend yields. Utilities, a smaller weighting in the portfolio, exhibits similar characteristics. These sectors are sensitive to the level of interest rates and continue to benefit from low or falling rates.

We remain cautious leading into the coming earnings reporting season due to factors such as the bushfires and the likely impact on the consumer before building activity begins to pick up. On a more positive note, the upcoming earnings season should see the initial impacts of lower interest rates (lower funding costs) shine through.

SWTZ invests in quality companies which payout relatively high and sustainable dividends and actively seeks out opportunities in companies that the manager believes can contribute capital returns.

[sc name="post-disclaimer-swtz"]

http://damai.balikpapan.go.id/assets/css/scatter-hitam/ https://scatterhitam-slot.com https://tth.com.tc/ https://gna.university/ https://guiqac.gnauniversity.edu.in/ http://tourism.gov.eg/ powergaming88 http://e-office.utu.ac.id/asset/assets/plugins/gacor/ powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 slot zeus nolimit city sv388 https://pariamantimur.pariamankota.go.id/assets/ https://sipatudia.bpsdm.sumbarprov.go.id/assets/mahjong/ slot jepang http://46.250.237.148:8005/ http://simokata.tabanankab.go.id/dist/img/thailand/ scatter hitam slot thailand link slot thailand 777 slot powergaming88 slot luar negeri slot gacor maxwin slot gacor hari ini slot gacor terbaru mahjong ways 2 slot thailand jp slot slot bni slot bri slot bsi slot danamon slot gopay slot server korea slot malaysia slot amerika slot rusia fan tan monopoly live lightning roulette mega ball sweet bonanza candyland mega sic bo mega baccarat andar bahar sbobet88 ktm303 slot dubai slot qris powergaming88 Slot Thailand Slot Zeus Pg Soft Starlight Princess Slot Gacor Maxwin Joker123 Sv388 Slot Thailand Slot Thailand Slot Qris slot thailand joker123 mahjong ways 2 888slot slot jepang slot thailand slot mahjong ways slot qris slot deposit dana slot dana nolimit city slot thailand sv388 slot888 slot kamboja http://labse.ce.undip.ac.id/sejarah/gacorx/ Slot Thailand Starlight Princess Mahjong Ways 2 Slot Maxwin slot thailand slot filipina slot88 slot thailand slot mahjong NEW SLOT POLA GACOR https://mandiri-gacor.angkolatimur.tapselkab.go.id/ jp slot slot ganas https://cheat-gacor.angkolatimur.tapselkab.go.id/ crazy time live slot qris https://sqris.angkolatimur.tapselkab.go.id/ slot akurat qris https://pragmaticplay.dharmasatyasarana.co.id/ https://dana.sidamaju.skom.id/ https://joker123.putramuko.co.id/ https://akun-pro-rusia.mariyadl.sch.id/ slot zeus server thailand server hongkong slot ovo slot gopay slot linkaja joker123 nolimit city sv388 starlight princess mahjong ways pg slot slot zeus sv388 idn slot https://joker123.elearningmansatuokit.sch.id/ slot server thailand slot thailand https://slot-thailand.itr.ac.id/ https://pn-watansoppeng.go.id/media/jui/server-thailand/ https://dinkes.hsu.go.id/wp-content/uploads/server-thailand/ nolimit city slot ovo slot gopay pragmati play starlight princess slot pg soft slot mahjong slot zeus digmaan slot mania slot zeus server thailand ying77 slot thailand judi bola live casino sv388 pg soft slot dana mahjong ways slot mania slot x500 ladangtoto slot server kamboja digmaan digmaan slot88 scv388 sabung ayam online slot live casino sicbo online slot thailand ladangtoto sv388 ladangtoto powergaming88 66kbet powergaming88 slot thailand ladangtoto slot thailand server thailand slot thailand slot thailand slot thailand slot gacor ladangtoto2 ying77 bet server thailand slot thailand ying77 slot88 ladangtoto ladangtoto slot maxwin sv388 sv388 slot gacor 66k bet slot dana sabung ayam inline slot mahjong slot toto slot server thailand slot gacor slot server thailand slot thailand situs slot wwg slot slot daftar judi slot online indonesia slot gacor slot mawin slot gacor slot thailand slot gacor slot gacor demo slot pragmatic sv388 slot88 pgsoft Daftar Judi Slot Online Indonesia Paling Gacor di Indonesia Daftar Situs Judi Slot Online SLOT88 lucky neko slot gacor slot88 slot kakek slot maxwin slot thailand Slot Mahjong Ways 2 Mudah Jackpot Paus di PG Soft Hari ini 2023 Lucky Neko Situs Slot Gacor Pgsoft Hari Ini SITUS SABUNG AYAM SV388 ONLINE DAFTAR LINK LOGIN APK AGEN SV388 https://puskesmasnaras.pariamankota.go.id/ maxbet slot gacor agen judi bola slot gacor slot nolimit slot777 https://furets-jaunes.org/ https://www.forestry-quarantine.org/ toto slot slot777 Slot Qris slot gacor 2025 https://leesgreekandpizza.com/ slot gacor powergaming88 powergaming88 powergaming88 slot gacor powergaming88 toto slot slot88 slot88 slot gacor slot gacor slot gacor slot thailand powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 slot toto slot thailand powergaming88 powergaming88 slot thailand slot 777 powergaming88 sbobet powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 slot gacor powergaming88 Slot88 Live Casino APEX303 APEX303 APEX303 APEX303 Mahjong Wins 3 APEX303 APEX303 Mahjong Wins 3 RTP SLOT GACOR Slot Gacor Slot Gacor Slot Gacor Slot Gacor APEX303 APEX303 Slot Thailand APEX303 APEX303 Slot Gacor APEX303 Slot Pulsa Scatter Hitam Slot88 Slot Thailand Slot88 Slot Gacor Slot Thailand Scatter Hitam APEX303 APEX303 Slot Gacor Situs Togel Slot Gacor Slot Gacor APEX303 Slot Gacor APEX303 APEX303 APEX303 CRAZY TIME SV388 Slot Gacor APEX303 Mahjong Wins 3 APEX303 Slot Gacor APEX303 LIVE CASINO APEX303 Slot Gacor APEX303 Slot Gacor 888SLOT slot bet 200 crazy time sv388 mahjong wins 3 slot pulsa crazy time 888slot scatter hitam slot777 gtr303 mahjong wins 3 scatter hitam sv388 slot bet 200 sv388 gtr303 ws168 bonanza candyland ga28 roulette online slot qris judi bola bandar slot gacor sabung ayam online slot qris crazy time slot88 sweet bonanza candyland slot online slot qris slot thailand sbobet mega wheel slot deposit qris slot online gampang menang slot88 slot qris slot gacor maxwin slot deposit 5000 slot qris slot gacor 2024 link slot gacor spaceman slot scatter hitam 888slot slot maxwin slot dana https://www.nidodevalverde.com/ 888SLOT Slot Thailand slot gacor https://pensivefederation.com/ slot gacor hari ini slot gacor sbobet gtr303 https://windizupdate.com/ slot online gtr303 slot thailand situs slot gacor slot toto scatter hitam crazy time crazy time casino online slot gacor gtr303 situs judi bola terpercaya gtr303 gtr303 gtr303 slot thailand ktm303 casino online togel online situs togel crazy time slot gampang menang slot gacor slot gacor ktm303 joker123 https://dinkes.hsu.go.id/scatter-hitam/ https://pmb.itsnupekalongan.ac.id/vendor/bin/scatter-hitam/ https://jurnal.univa-labuhanbatu.ac.id/public/site/scatter-hitam/ https://lpm.univa-labuhanbatu.ac.id/wp-content/themes/jnews/scatter-hitam/ https://scatterhitam-slot.com https://tth.com.tc/ https://gna.university/ https://guiqac.gnauniversity.edu.in/ http://tourism.gov.eg/ powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 powergaming88 Slot Thailand Starlight Princess Mahjong Ways 2 Slot Maxwin https://sipatudia.bpsdm.sumbarprov.go.id/assets/mahjong/ scatter hitam powergaming88 sv388 idn slot https://slot-thailand.itr.ac.id/ https://pn-watansoppeng.go.id/media/jui/server-thailand/ slot mania slot zeus ying77 judi bola live casino sv388 mahjong ways slot mania slot server kamboja digmaan slot88 slot live casino slot thailand powergaming88 powergaming88 slot thailand ladangtoto slot thailand server thailand slot thailand slot thailand slot thailand slot gacor powergaming88 ladangtoto sv388 slot toto slot server thailand slot thailand situs slot wwg slot slot gacor slot mawin slot gacor slot thailand slot gacor slot gacor slot88 pgsoft Daftar Judi Slot Online Indonesia Paling Gacor di Indonesia Daftar Situs Judi Slot Online SLOT88 lucky neko slot gacor slot88 slot maxwin slot thailand Slot Mahjong Ways 2 Mudah Jackpot Paus di PG Soft Hari ini 2023 Lucky Neko Situs Slot Gacor Pgsoft Hari Ini SITUS SABUNG AYAM SV388 ONLINE DAFTAR LINK LOGIN APK AGEN SV388